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The men were refused bail at the High Court sitting in Belfast

Two men have been charged in connection with a vast drugs operation involving virtual currency and the "dark web".

Richard Sinclair, 32, was arrested after police seized drugs worth an estimated £100,000 at his home at Cranagh Road, Coleraine, on 26 August.

In a separate raid, Kyle Hall, 25, of Chamberlain Street, Belfast, was also detained. Both men were refused bail.

The "dark web" is a collection of websites that hide the operator's identity.

Drugs linked to a European-wide investigation were to be sent through the post hidden inside jigsaw puzzles, prosecutors said.

The men are jointly charged with conspiracy to supply and possession of Class A drugs with intent to supply.

Mr Sinclair is also charged with transferring criminal property, while Mr Hall faces charges of having Class B and C drugs with intent to supply and possessing criminal property.

In court in Belfast on Friday, a prosecution lawyer said police discovered Mr Sinclair in his bedroom destroying evidence on an encrypted memory stick. Hundreds of drugs transactions were displayed on a nearby computer, the lawyer claimed.

The court was told police also seized five sealed packages from his home. Two were DVD boxes with £1,500 cash in each and the other three contained suspected MDMA powder - the base from which ecstasy is made - the prosecution said.

A further £6,000 in cash and quantities of LSD were also recovered.

Police were also alerted to a parcel addressed to Mr Sinclair at a courier depot in Belfast. It contained two jigsaw puzzles with a total of 3,000 MDMA and other psychedelic pills with a potential street value of £40,000.

CCTV footage allegedly showed Mr Hall had left the parcel at the depot. Police searched his home and seized 1,000 ecstasy tablets, 120 boxes each containing 28 diazepam pills, 2kg of herbal cannabis, 500g of crystal MDMA and £7,500 in cash, the court heard.

The lawyer set out admissions made by Mr Sinclair in police interviews. This was a complex investigation involving mainland Europe, in particular the Netherlands, the lawyer said. She said police described his method as "ingenious".

Despite Mr Sinclair's admissions, his defence lawyer argued he did not fit the profile of a high-flying drug supplier and was feeding his gambling habit.

"It simply mushroomed and got out of control," he said.

Although Mr Hall also made admissions, he denied conspiring with Mr Sinclair. The judge was told that he claimed he was running a legitimate DVD supply business.